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The graphics processor in Apple's upcoming iPhone could have been based on Imagination's new PowerVR Series8XT GT8525. Instead, the two vendors are locked in an open battle, and Imagination is threatening legal action against Apple, which is developing a homegrown GPU.

The last few months haven't been smooth for Imagination Technologies, which this month said it was planning to sell its MIPS and Ensigma processor businesses. Apple likely won't be a customer for the new Series8XT GPU, which is based on the Furian architecture. But the company's PowerVR GPUs are used in many low-cost and mid-range phones.

The GT8525 is targeted at high-end smartphones, automotive computers, set-top boxes, and smart devices. It is the first new GPU design in the Series8XT line, succeeding the Series7XT, which powers graphics in Apple's iPhone 7.

Imagination is now building a business around PowerVR graphics processor designs, and that makes the GT8525 critical to the company's future. It represents the company's top-performing GPU design at a time when high-end GPUs are becoming more important in computing devices. GPUs are handling applications like computer vision, gaming, and artificial intelligence.

As GT8525 GPU design is built for high-end mobile gaming and virtual reality. It supports 4K video, so the mobile headset experience is improved. It also includes tweaks to bring machine learning on board mobile devices.

For cars, it is aimed primarily at infotainment systems but will also help assist autonomous driving when a driver remains at the wheel. Companies like Nvidia are boasting their GPUs can help build completely autonomous cars, but Imagination is keeping its expectations modest.

PowerVR cores, based on the Furian architecture, deliver up to a 35 percent improvement in performance from older GPUs. Gaming performance improvements could measure from 70 to 90 percent, though the performance may vary based on core designs.

The GPU has a shader processing unit and system level blocks surrounding it. The GPU design has a new instruction set architecture, a faster pipeline, and processing optimizations that make it faster. The GPU supports Vulcan, OpenCL, and other key APIs for gaming and application development.

Device makers can license the GT8525 now, meaning it may appear in smartphones soon. However, Apple's decision to step away from PowerVR is a loss for Imagination, and it raises questions about how many companies will adopt GT8525.

Apple was the anchor of Imagination's PowerVR. Other GPUs, like ARM's Mali and Qualcomm's Adreno, are emerging as challengers in mobile devices.

Imagination no longer has "the lead in mobile graphics that they had a few years ago," said Jim McGregor, principal analyst at Tirias Research.

Imagination has gained some business with mobile chipmaker MediaTek. In the end, if PowerVR GPUs are cheaper than rivals, Imagination has a chance to succeed.